Ours is a small Recruitment firm (proprietorship), where we provide consultancy to companies with regards to hiring of suitable candidates. Our role is restricted to only finding suitable candidates and lining them up. Once selected, candidates are placed on companies' payroll and we raise bills for it. There after companies normally take 30-45 days to clear the bills.
Kindly clear some of my doubts related to service tax, in view of given points:
1) Our billing for year 2014-2015 was close to 9.5 Lacs but the actual revenue generated was Rs 10.50 lacs ( additional revenue of 1 lacs came from pending bills of previous year, i.e. Q4 of 2013-2014 (bills are usually cleared in 30-45 days). Are we supposed to pay service tax on 10.50 lacs ( actual revenue generated) or 9.5 lacs ( billing in given financial year)?
2) If the service tax has to be paid on revenue of 10.50 lac, are we supposed to pay 1.47 lacs (14% on 10.50 Lacs) by the completion of Q1 of 2015?
3) What happens if our client refuses to pay additonally for service tax? As mentioned earler, we are small company and we cant lose our clientele.
4) I was told that 25% of taxable amount will have to be made by consultancy service providers and 75% of it will be paid by clients. Is it true?
5) I was told that for the companies, which are going for service tax registeration for the first time, taxable amount is restricted only to the amount exceeding 10 lacs (we are exceeding the given limit by 50,000, in case 10.50 lacs is to be taken as a criterion for tax payment) . Am i correct in understanding the concept?
Any help will be me much appreciated.
Thanks
CAclubindia
